Reps seek harmonised framework for timely issuance of tax clearance certificates
The House of Representatives on Thursday directed its Committee on Finance to interface with the Joint Tax Board, the Nigerian Revenue Service (NRS) and relevant State Inland Revenue Services to
The House of Representatives on Thursday directed its Committee on Finance to interface with the Joint Tax Board, the Nigerian Revenue Service (NRS) and relevant State Inland Revenue Services to develop a harmonised national framework for the timely issuance of Tax Clearance Certificates (TCC).
The resolution followed the adoption of a motion sponsored by Adedayo Balogun.
The House also urged State Inland Revenue Services across the country to ensure that Tax Clearance Certificates for Pay-As-You-Earn (PAYE) employees in both the public and private sectors are issued not later than three months after the end of the preceding tax year.
Presenting the motion, Balogun said the taxation of personal income in Nigeria is governed by the Personal Income Tax Act, which provides the legal framework for the assessment, collection and administration of personal income tax.
According to him, Section 81 of the Act establishes the Pay-As-You-Earn system under which employers are required to deduct personal income tax from the salaries and wages of employees and remit the amounts to the appropriate tax authorities on behalf of the workers.
He noted that Section 85 of the Act mandates tax authorities to issue a Tax Clearance Certificate to taxpayers once it is confirmed that their tax liabilities for the relevant years have been fully discharged.
Balogun, however, said that millions of Nigerians in both the public and private sectors who faithfully fulfil their tax obligations through the PAYE system rarely receive their Tax Clearance Certificates due to delays by relevant tax authorities.
He said the absence of a clearly defined timeline for issuing TCCs to PAYE employees has created administrative inefficiencies and bureaucratic bottlenecks within the tax administration system.
The lawmaker expressed concern that affected employees are often compelled to resort to irregular means of obtaining or borrowing Tax Clearance Certificates in order to meet urgent requirements such as processing official documents, completing financial transactions, securing school admission for their children, or contesting for political offices.
He added that many PAYE employees have also had to spend part of their earnings to obtain the certificates whenever they are required.
